Binary Option, also known as Digital Options, all-or-nothing
options, or Fixed Return Options (FROs), have been available since the middle
of 2008 and are simple for any trader – novice or expert- to understand.
The Binary Option Option is in essence nothing more than a prediction on which way the price of a stock, commodity, index or foreign currency will move by a designated expiration time. With Binary Option Options, you never purchases or own the asset as you’re only predicting the direction that the asset will go. There are only two possible outcomes and the price of the asset does not matter. As far as you’re concerned, all that matters is if your prediction was correct or incorrect.
The Binary Option Option is in essence nothing more than a prediction on which way the price of a stock, commodity, index or foreign currency will move by a designated expiration time. With Binary Option Options, you never purchases or own the asset as you’re only predicting the direction that the asset will go. There are only two possible outcomes and the price of the asset does not matter. As far as you’re concerned, all that matters is if your prediction was correct or incorrect.
Through
the platform, you simply:
1. Choose the asset you want to
trade
2. Click on “Call” if you believe the asset price will rise, or “Put” if you believe that the price will fall 3. Wait for outcome 4. Collect your profit Binary Option Options in Global Financial Markets |
Binary Option options fall under the umbrella of exotic
options but within financial markets they are often referred to as digital
options. While digital options are very simple to understand and easily traded,
the calculations behind the pricing is sophisticated and so they are considered
exotic options.
Digital options are usually traded OTC (over the counter)
across all assets in financial markets but more commonly used within the Forex
and Interest markets. Recently numerous stock exchanges have produced listed
digital options on selected stocks, commonly known as FRO (fixed return
options). Today the CBOE offers fixed return options on S&P500 and VIX,
also 20 stocks were listed on
the AMEX in 2008.
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